Houston oilfield service company Baker Hughes has entered into a deal to boost artificial intelligence in the oil and natural gas industry.

Baker Hughes entered into a joint venture agreement where it bought a minority stake in the Redwood City, California-based artificial intelligence company C3.ai.

Under the agreement, the two companies have also launched a joint venture that seeks to boost artificial intelligence in the oil field by combining C3.ai's technical savvy with Baker Hughes' industry experience.

"This agreement is a mutual recognition of the technology leadership we each bring to the table and a willingness to work in new ways that deliver the best possible outcomes for our customers," Baker Hughes CEO Lorenzo Simonelli said in a statement. "Integrating our strong digital capabilities and oil and gas industry expertise with C3.ai's unique AI solutions, we will accelerate the overall digital transformation of this industry."

Artificial intelligence software will be used to improve productivity and efficiency at oil and natural gas operations by ingesting massive quantities of data and predicting problems before they occur.

Under the joint venture agreement, Baker Hughes now has a seat on C3.ai's board of directors.

"BHGE is a technology-first company with deep expertise, a global footprint and strong relationships across the industry," C3.ai CEO Thomas Siebel said in a statement. "Combining its strengths with the unique industrial AI capability of C3.ai, we will deliver transformative change to one of the world's most important industry sectors."

Oil and natural gas companies have been slowly embracing digitalization since a July 2014 crude oil price downturn that made it necessary for companies to use technology to lower their per barrel costs. Global oil giant Shell could be one of Baker Hughes and C3.ai's first customers.

"There is real potential in exploring the fusion of existing oilfield technology and emerging digital technology, in this case combining C3.ai's capabilities with BHGE's domain expertise to create new solutions that truly address oil and gas specific challenges with powerful advanced analytics technology," Shell Group CIO Jay Crotts said in a statement.